Prange, Sven

1 article of this author has been cited in the European Press Review so far.

Handelsblatt - Germany | 23/10/2012

EU can learn from Iceland's bank rescue

Four years after the severe crisis in Iceland's banking system the country's economy is once again growing. The liberal business paper Handelsblatt sees this is as proof that there are alternatives to the EU's crisis policy: "With a combination of creditor participation, cautious monetary policy and clever economic policy the Icelanders have managed to return to the group of the most rapidly growing economies in the industrialised world in record time. … Reykjavik nationalised its banks, but it then allowed them to initiative insolvency proceedings and split them up: each one of them was allotted a basic area of business, for example private customer services, which were then offered on the market. And each had an institute, a kind of 'bad bank' in which private shareholders could amortise financial junk. The banks were also made to help private debtors regarding their mortgages: all mortgage burdens above 110 percent of the new, real market value of a house were waived. The government also took over the mortgage payments for low-income borrowers for a certain period. So unlike in Spain or Ireland there was no large-scale expropriation."